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Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
 The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent retreat from almost 11-year highs is raising the question whether a counter seasonal market drop is in the cards during the 2H of the year in the context of a broader market upcycle.
While the market is multi-factorial with fundamentals, sentiment and inter-freight correlation amongst sizes feeding one another, the current Cape market correction was exacerbated after Chinese authorities intervened to curb iron ore price speculation. A subsequent sharp reversal of iron ore and steel prices from record highs and FFAs selling off contributed to pulling the Cape market lower, while the smaller segments were unaffected. It is well known that Capesize is characterized by the highest freight volatility and even though that we expect volatility to keep up, we are not convinced that this is the turning point for a prolonged market correction. Fundamentals are likely to outlast volatility and we cannot exclude that the next leg higher will find a much higher peak over the next two quarters with cargo export seasonality emerging stronger across all commodities and particularly iron ore.
Iron Ore exports to accelerate in 2H2021; the urge for higher quality iron ore is likely to intensify: China’s iron ore inventories have been destocked by more than 8.0 million tons over the past month amid elevated demand and major iron ore miners running behind their export guidance, likely to trigger a new restocking wave. Forward iron ore prices on the curve, even if spot iron ore prices softened from here, incentivize iron ore miners to accelerate exports during the 2H2021.
So far, China’s emissions regulations on steel production were unsuccessful in containing it. Record high steel mills margins incentivized higher steel production ex. strictly regulated Tangshan with YTD Jan-Apr crude steel production up +15.6% y-o-y. If steel production controls intensify during the second half, this will further increase demand for high quality iron ore, in order to optimize the steel process. In addition, the scrap scramble from steel mills outside China could put a lid on China’s increasing scrap usage in the steel mix in the short term.
Macro indicators continue to be bullish for dry bulk demand in the next quarters: China’s Property new starts - a leading indicator of steel demand – have increased +19.0% YTD in 2021, while April’s y-o-y growth slowed down at +9.3% y-o-y. Any slow down in the growth of new floor space under construction will not immediately translate into lower steel and iron ore demand; developers are likely to accelerate property completions from now on continuing to drive demand.
Other than China, global steel production and demand conditions are robust, reflected by record high steel prices both in the US and Europe. Spot and forward steel prices have surged, giving steel mills the opportunity to hedge at profitable levels, therefore global steel production will continue to expand.
Global manufacturing PMIs are at 10 year cycle highs, despite having softened during April and lead demand for commodities. Oil prices have been lagging the rise in other commodities and are projected to increase significantly over the next two quarters, which could provide further support to the dry bulk market via - and not limited to - the bunker-$ per ton freight- speed relation. Fundamentals of other dry bulk commodities are also robust, with electricity generation set to accelerate over the summer in addition to increased industrial production, while China’s domestic coal production is underperforming amid mine safety checks.
Early signs of credit tightening: Following a record high stimulus over the previous year, latest credit growth figures in China indicate a slow-down in credit supply during April, however as long as inflation at the producers level accelerates the tightening impact is muted in our view. China’s potential deleveraging from here should not be expected to have a negative effect on dry bulk commodities demand, until credit tightening starts to interfere with producers’ profit margins.
Last but not least, China’s political tension with Australia is more likely to translate into higher ton-miles in the medium term, with Atlantic production of high-quality iron ore and coal substituting for any potential loss of Australia’s market share. In the longer term, China’s 14th year plan that calls for an increase of electric arc furnaces (scrap) in steel production to 15-20% by 2025 and self sufficiency share of iron ore above 45% will certainly have an impact in the way iron ore is procured with China having higher control over both supply and iron ore prices.
by Tamara Apostolou,
Research Analyst
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 14 April 21
MARKET INSIGHT - INTERMODAL
After a series of months where the dry bulk sector was attracting most of the buying interest, tankers SnP activity spiked in the previous weeks. O ...
Tuesday, 13 April 21
INDONESIAN COAL PRICE REFERENCE IN APRIL UP AGAIN ON FIRM DEMAND
COALspot.com: The Indonesia coal price reference for April 2021 settles at US$ 86.68 per ton FOB vessel.
The Indonesia coal pr ...
Monday, 12 April 21
CHINA'S ECONOMIC RECOVERY PUSHES COAL MINES TO INCREASE YIELD - GLOBAL TIMES
China’s fast economic rebound from coronavirus has driven up electricity demand, leading to higher consumption of coal which is seeing rising ...
Monday, 12 April 21
GLOBAL COAL PRODUCTION EXPECTED TO RISE BY 3.5% IN 2021, SAYS GLOBALDATA
Global coal output is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions, with significant reductions obse ...
Wednesday, 07 April 21
KOMIPO ISSUED A TENDER FOR TOTAL 1,560,000 METRIC TONS OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for total 1,560,000 Metric Tons of Bituminous coal for i ...
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- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Marubeni Corporation - India
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- The University of Queensland
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Planning Commission, India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
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